• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Breaking Health Care Research: How Obamacare Undercuts Existing Health Plans

    Before passage of the Patient Protection and Affordable Care Act (PPACA), President Obama made several promises to the American people in an attempt to build support for his health care plan. Among them was a promise that “nothing in our plan requires you to change what you have.”

    However, since the PPACA was signed into law and began down the long road of enactment, the truth has proven to be the opposite: No matter how much individuals may like their current health plan, under the new law, there’s no guarantee they can keep it. In recent Heritage research, health policy expert John Hoff explains the many ways in which this will occur. He writes:

    What was proffered as an expansive political concession has been constricted and put into a legalistic straitjacket, first by the law itself, and then by confused regulations issued by the Administration. The bottom line is that all insurance plans, including coverage people already have, must meet some portions of the new law, and most plans will soon be subject to all its requirements. The President’s assurance of continuing with existing plans is essentially a dead letter for all Americans.

    Hoff highlights a number of ways in which Americans are likely to see their health plans change. They might even risk losing their current plan altogether. They include:

    • Provisions still apply to existing plans. Plans that were in effect before the enactment of the law are supposed to be “grandfathered in” under the new law, but they must nevertheless comply with numerous insurance regulations. This undercuts existing health insurance.
    • Small insurers will exit the market. Some smaller insurers may not be able to meet the medical-loss ratio requirements, which will also apply to grandfathered plans, causing those plans to exit the market completely.
    • Medicare Advantage will be cut. Under the law, funding for Medicare Advantage plans will decrease by $145 billion over the next 10 years. Lower payments to these plans will lead to a reduction in benefits or force them to leave the market altogether.
    • Regulations limit application of grandfather status. Regulations after the passage of the new law will define who will qualify for grandfathered status. Those that do not qualify will be required to abide by the PPACA provisions, thus changing current plans even more drastically.

    To read Hoff’s full analysis on how Obamacare will undercut the health plans Americans already like and want to keep, click here.

    Amanda Rae Kronquist contributed to this post.

    Posted in Obamacare [slideshow_deploy]

    8 Responses to Breaking Health Care Research: How Obamacare Undercuts Existing Health Plans

    1. George Colgrove, VA says:

      There has been a lot of talk about this legislation. Last I knew it was deemed unconstitutional, and thus should not even be discussed – unless appealed.

      Where are we going with this? Is it possible the feds will always be involved with this private sector business? Or is it possible we can return healthcare back to the private sector?

    2. teresa defoor dalton says:

      everyone seems to be really concerned with what is going to happen in the future while not many are acknowledging what already has happened and what is happening today. we, being the people who live on social security and disability have been getting messed over every since obama took over. we have had no cost of living increase since he took office. but the worst part is that both years i have recieved a letter from social security telling me there has been no cost of living increas in the real world so we will not be recieving a raise. i sure would like to know how long it has been since one of the obamas has been in a grocery store or a clothing store or a gas station. i'm not sure about where he shops but in my world it takes almost 10.00 to get a gallon of milk and a loaf of bread. before he makes this kind of decision he sure needs to live in the real world for a month or so so that he can see the truth for himself. and that does not even include our dr vissits or our copays on our meds that got higher this year again. just my thoughts. hope i am not offending anyone, but i am only speaking the truth.

    3. Jocelyn Salem, NH says:

      We do not need Socialized Medicine in the United States we cannot afford the Obama's Socialized Medicine Agenda it's too expensive for to be force into a government run healthcare witch do not work in England and Canadian that's they come over to get Medical Treatment.

      People should not be force to buy product it. It's Uncounstitution.

    4. Pingback: COACHEP » Blog Archive » News about Obamacare issue #273

    5. Pingback: Video News Blog » Breaking Health Care Research: How Obamacare Undercuts Existing Health Plans – Heritage.org (blog)

    6. Holger Finley, Roy, says:

      It is my understanding that the Constitution does not provide that the Federal Government inact any Health Care Plan, period. Regulate contracts between states that is to see that for example our private Health Insurance is recognized in every State. The States are suppose to be Supreme we can better run our own affairs closer to home. The only job insurance there is in this country is the Federal Employees from the President on down they are going to do what ever is necessary to create and keep their jobs at our expense. We are financing a Monster that is way out of control and it must stop or we will go down in a heep of debt. The Constitution hangs by a thread even now. God help us but as we know God helps those who helps themselves.

    7. ******************** says:

      The facts are that many people cannot afford health care coverage due to low income. The number of people with low income has steadily increased over the past twenty years and has increased in the last five years. And yet we Americans are so selfish that we cannot find a way to establish some type of health care for these folks. We forget that we got our life not from our own ability but from our parents. We got our basic education with someone paying for us. And we may have had other helpers in our life to help us. We do not pull ourselves up by our own boots straps because those boots and straps were freely given to us. So with all the complaints none have come up with a practical solution to help those who cannot afford what we have in terms of health care. Here in Nevada, we are the last State in the Union to have decent child health care – the last on the list. What about those children? What about our politicians who fail to find solutions rather than complain and lie (as in death panels, etc)? I would suggest that if you complain, then come up with a practical solution. My solution is simple – provide that same type of health care that federal workers have. Is it run by the government – yes and no. But I for one have never had any interference by the government and have had the best coverage through that plan. So if those in Congress take advantage of it (and ask all the parties involved if they have it), why not the rest of America?

    8. Jeff, San Ramon, CA says:

      The current insurers don't want to compete in the private sector, they want to be the manager of health care while the Feds underwrites the entire system. In essence a Fanny Mae/Freddie Mac for health care. Why be the landlord and risk losses, when you can be the management company and collect fees regardless? Of course the Feds don't care because it's not their money and it's not their health as they exempted themselves and their union buddies from the plan.

      How else do you explain why Anthem/BC announced a 45% premium increase weeks after Brown won MA and ObamaCare was nearly dead? They nearly single-handedly ressurected that plan by breathing life into the Dems to "git 'er done" regardless of the outcome.

      Blue Cross, Blue Shield, Kaiser, etc. stand to make out like bandits when the risk is removed and profits guaranteed. You think the housing bubble was bad? Wait until the Health Care bubble.

      Ever since the government go involved in HC in the 60's HC costs have skyrocketed relative to inflation. EVerytime the gov't tries to "fix it" all they succeed in doing is "fixing it" for the insurers.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×